19.07.202109:31 Forex Analysis & Reviews: The Fed sees no real competition for the dollar in bitcoin

Bitcoin has spent the last few days in a narrow side channel near the level of $31,100 on the 4-hour timeframe. Volatility has fallen to almost zero, and the market is now very "thin". This means that even a relatively small transaction on bitcoin can lead to a serious price fluctuation. It should be noted that there has been little to no important news for bitcoin lately. The markets have already digested the information that China has kicked out all miners and banned all Chinese financial organizations from providing any services related to cryptocurrencies. Therefore, they are waiting for new data, for example, from the United States. Last week, Fed Chairman Jerome Powell, speaking in Congress, did not ignore bitcoin either. In his opinion, bitcoin has failed as a means of payment, and is used only as anonymous payments. The head of the Fed also hinted that work is underway to create a digital dollar, but so far there is no certainty that the advantages of the Fed's own digital currency will exceed the disadvantages. Nevertheless, if the Fed still issues a "digital dollar", then there will be no need for other, "private" cryptocurrencies. According to Jerome Powell, the US dollar currently has no real competitors and it will not lose its reserve status, even if other central banks of the world issue their digital currencies.

But for bitcoin, this information has a "moderately negative" color. The fact is that bitcoin may not be a competitor for the dollar, but the digital dollar can be a very serious competitor for bitcoin. Although, of course, the tightening of tax legislation in the field of digital assets will be more important. Also, the Fed may help bitcoin again in the coming months, as its printing press continues to work at full power, which means that more money continues to become banal in America. Recently, there has been an outflow of capital from the cryptocurrency market, but do not forget that it was during the pandemic crisis that bitcoin grew from $4,000 to $64,000. Therefore, the most important factor that helped bitcoin set a new value record remained relevant. However, in order for bitcoin to grow again, it also requires the desire of traders and investors to buy cryptocurrency again. And it is not observed yet because of the weak fundamental background.

Technically, on the 4-hour timeframe, bitcoin quotes were fixed below the ascending trend line, as well as below the Ichimoku cloud. Also, the price has fallen to the level of $31,100 per coin and has been trying to overcome it for three days. If this overcoming takes place, bitcoin will only hold the level of $29,700 from a new collapse of quotes. Overcoming it will open the way for sellers to the level of $24,350.